Monday 20, December 2021

Turkish Lira and Wrap

The Turkish Lira shot up 18% today after Erdogan unveiled a series of measures to stabilize the currency. I haven’t had time to read the details of what he is proposing, but I somehow doubt that it will work. However, he’s had an important tactical victory, which is likely to embolden him to try to buck the market in the future. Some Lira bears will have lost money today, but if they’ve been doing this for a while, they’ll be up overall.

Turkey is pretty precarious, being dependent for imports for nearly all its energy needs.

Generally, today was risk off, except bonds didn’t go up very much. They are very high, though, in the face of very high CPI prints. The Fed is coming under a lot of pressure, and more people are expressing skepticism of whether it can deliver its mandate. If you’d like to listen to a critic, just Google Jeff Snider, with his sidekick Emil Kalinowski. Snider’s argument is that the Fed does not, in fact, control the money supply, because the Eurodollar market is vast compared even to the balance sheet of the Fed, which in any case struggles to direct the changes in the numbers close to home that it supposedly can control, such as M2:

London housing

I tweeted about the situation of new builds in London. It seems incredible that a city that elects socialist MPs and has a Labour mayor can be so dysfunctional when it comes to building houses for ordinary citizens. In this regard, it’s the same as San Francisco. I think that a lot of professionals in London just don’t want too many chavs living next to them.

London's extraordinary surplus of empty luxury apartments revealed https://t.co/XgUvDWjCEK via @ConversationUK

— Steve Hemingway (@S_Hemingway_) December 20, 2021

Image of the day

Sun on Prospect Street (Gloucester, Massachusetts), 1934 #hopper #edwardhopper pic.twitter.com/uOD4AdY79l

— Edward Hopper (@artisthopper) December 20, 2021